Week 8: Lawmakers try to "Play Nice" during Budget Negotiations

Sunday, March 6, 2022

Dear Friend,

Overall, bipartisan support on some key issues has gone better than expected. I attribute that to the dynamic of having one chamber controlled by Republicans and the other controlled by Democrats. But these fragile compromises can easily be undone when legislation hits the Governor’s desk.

I do have to register my disappointment in the decision of the House Republicans to deny Virginia voters the opportunity to vote on two constitutional amendments that reinforce our respect for human rights and human dignity. One amendment would have repealed the ban on gay marriage, and the second amendment would have restored the voting rights of felons once they had served their time. Polls show that a majority of Virginians would have voted for these amendments, but now they will not have that chance. We definitely need to continue this fight and, over time, I believe we will gain the necessary Republican support to do the right thing. I keep reminding myself of Dr. King’s wise words: "the arc of the moral universe is long, but it bends toward justice."

Overview of Budget - The House and Senate each passed their respective budgets for the upcoming biennium and the approaches taken are very different. The House incorporated nearly all of the tax cut proposals recommended by Governor Youngkin, while the Senate budget closely follows Governor Northam’s proposed initiatives. Both budgets address an increase in Medicaid reimbursement levels, additional waiver slots, more services for those with developmental disabilities, and incentives to increase the pipeline for nurses and behavioral health professionals. Of course, the ability to adequately fund these critical human service programs depends on the availability of ongoing dollars. Based on history, experts are warning us that federal cut-backs are likely to follow the recovery and such cut-backs would harm Virginia’s economy. In light of this prediction, I believe that making investments in priorities like education, health care, and other public services is a better approach to lifting up families and communities than enacting permanent and costly tax cuts.

Highlights of Major Tax Cut Proposals:

Standard Deduction - The House budget doubles the state standard deduction to $9,000 for an individual and $18,000 for a married couple filing jointly. This action would reduce state resources by about $2.1 billion over the next two-year budget. This is a costly tax cut that does not help Virginia’s lowest income tax filers. With this in mind, the Senate budget does not include any changes to the state standard deduction. Bills introduced in the Senate to increase the standard deduction were “continued” to the 2023 session and placed into a study.

Elimination of the Sales Tax on Groceries and Personal Hygiene Products - Similar to Governor Northam’s introduced budget, the Senate budget proposes to eliminate the 1.5% state sales tax (most of which funds public education) that applies to groceries and personal hygiene products (effective Jan. 1, 2023), while leaving in place the 1% local sales tax option that exists for localities. The House budget adopts this policy as well, but the Senate budget replaces revenue for local school divisions based on school-age population. The House replacement approach relies on a formula based on local sales tax collections. Neither body replaces the lost transportation funds. 

Earned Income Tax Credit (EITC) - Unlike the federal EITC and nearly all state EITCs, Virginia has a nonrefundable state EITC, which caps the amount of the credit available to families. Refund-ability would help working families across the state. The Senate budget would address this issue by making the state EITC fully refundable at 20% of the federal EITC. The House budget removes Governor Northam’s refund-ability language.

Spending Pressures & Major Differences Between the House & Senate Budgets: 

Increasing Teacher Pay - Similar to Governor Northam’s introduced budget, the Senate budget funds the state portion of a 5% increase in pay for teachers and other school staff ($751.0 million over the biennium). The Senate’s budget would also use $137.4 million of American Rescue Plan Act (ARPA) funding to pay for a $1,000 bonus (no local match required) for teachers and staff this year. We are trying to address teacher shortages and burnout. I hear from school systems across the Commonwealth about the challenges divisions are facing in recruiting and retaining teachers. The House budget would provide a 4% salary increase for teachers and a 1% bonus ($682.6 million over the biennium). 

The difference in teacher pay for public school teachers is not surprising since Governor Youngkin has made it very clear that creating more charter schools with public money is a top priority. Although the Senate defeated all of the charter school bills, a "lab" school bill passed that enables colleges and universities to operate K-12 educational facilities. A $150M appropriation has been set aside for this initiative, but there is little enthusiasm on the part of the higher education community for participating in the effort. In part, because the continuation of grant dollars is tenuous and the operation of K-12 institutions is outside of the main mission of higher education.

Removing the Cap on School Support Staff - This is the top priority of the Association of School Superintendents. Many students come to school with barriers to learning and need help to fully engage in their academics. Support staff, such as counselors, social workers, and school psychologists, play a critical role in addressing these barriers. But lawmakers put a “cap” on dollars available for support staff in 2008 and that cap has not yet been removed. The Senate’s budget would partially remove the cap, providing nearly $272 million to increase support staff positions. The House budget does not include any such proposal.

Upcoming Impacts on Medicaid Recipients - Upon the expiration of the federal Public Health Emergency, all adults and children enrolled in Virginia’s Medicaid program will need to undergo eligibility redetermination for the first time since the start of the pandemic. The Senate budget proposal includes language to form a Secretary of Health and Human Resources-led task force to help plan and advise the Department of Medical Assistance Services on this unwinding process. The language also gives authority to the work-group to use ARPA funds for these efforts. The House budget does not include any such proposal.

Efforts to Cover Uninsured Youth - The Senate budget proposal includes language directing the Joint Subcommittee for Health and Human Resources Oversight to evaluate options to establish a state-funded health coverage program for children under 19 years of age who are uninsured and would qualify for Medicaid or FAMIS except for their immigration status. I have tried several times to get these children covered, so I am delighted that we are least moving forward with a study. The House budget does not include any such proposal.

Highlights of My Legislative Proposals that Have Passed Both Chambers:

Recovery Homes - This bill establishes for the first time in legislation credentialing criteria for recovery homes and required disclosures to prospective residents. Recovery homes provide substance free living accommodations to individuals with substance abuse disorders.

Expedited Medical Licenses to Expand Access - This bill allows for immediate provisional licenses for doctors hired by hospitals or dialysis facilities. It also enables the Virginia Board of Medicine and other health professions boards to enter reciprocal agreements with Virginia's surrounding states to expedite the issuance of licenses to practice medicine or offer behavioral health services.

Emergency Authority for COPN Requests to Expand Beds - This bill enables the Commissioner of Health to grant Certificate of Public Need Requests to hospitals and nursing homes during a public health emergency for up to 30 days after the expiration of the emergency order. Virginia hospitals and nursing homes were caught in a loop of red tape during the recent COVID-19 emergency related to the lack of clarity in legislation to grant bed expansion requests. Experts believe my proposed legislation will fix this problem.

Energy Efficiency Bills that now Includes Roofs - I want to thank the environmental community for helping me pass legislation that will enable state approved energy contractors to include new energy efficient roofs in their projects. Often times projects are underway when it becomes apparent that a new roof is needed to meet energy efficiency standards. Under my bill, the prime contractor can hire a sub-contractor through an RFP process to install a new energy efficient roof. There have been very few pro-active wins for the environment during this session and my bill is one such win.

Highlight of My Key Bills that are in Conference:

Critically Missing Adults - I worked with the National Alliance on Mental Illness (NAMI) to tweak existing legislation to ensure that those who are missing and could be a danger to themselves or others can qualify for Critically Missing Adult Alert status. 

Provisional License for Foreign Licensed Teachers - I have been working with Delegate Kathy Tran to ensure that foreign licensed K-12 teachers can be granted a provisional license at the discretion of the Department of Education to teach in the Commonwealth. Republican lawmakers have held up this proposal and we need to find out why. School systems across the Commonwealth are asking for this legislation and it is particularly needed now that schools are suffering such severe shortages of teachers. 

Medical Debt Repayment Plan - I am hopeful that this proposal will find bi-partisan support since uninsured families suffering from medical debt need reasonable options for repaying that debt. There are federal regulations that govern the behavior of hospitals when it comes to collecting medical debt payments and my legislation builds these protections into state law. 

In Summary - Please do not hesitate to contact my office with your questions and concerns, and stay tuned for next week’s newsletter. There will be more information on the budget and a snapshot of how the Democratic women in the Senate will celebrate Women’s History Month.

It is an honor and privilege to serve you in the General Assembly. I am looking forward to providing legislative updates when the session ends.

Sincerely,